The importance of having a student budget
My name is Joe and I graduated from university in 2013 although it seems like an entire lifetime ago now. Looking back, what I found the hardest about the University experience was writing my dissertation. It took several long months of determination and a lot of library sessions. The thing I found second hardest was managing my money. That’s what this article will cover.
When I began my academic journey, I found myself in the same position as most UK students; I was eighteen years old and about to start living on my own for the first time. I had no idea whether I’d be able to survive on my own and I was definitely very nervous about the whole situation. If you’re having the same feelings, don’t panic. It’s perfectly normal. University is going to be one of the most important periods of your life and I can tell you from experience, it’s also going to be one of the most fun, so relax.
However, that initial moment when your boxes of belongings are all stacked in your new bedroom and your family all drive away waving, (tears probably falling from your mum’s eyes and maybe even your dad’s too) can be very daunting. You’re finally on your own, independent and responsible for everything your parents used to do like cooking and cleaning. Take pride in this moment instead of losing your mind, you’re free!
Quite soon though, your mind is going get to the topic of money. Most students get their tuition fees and maintenance loan from Student Finance. This means that tuition fees are paid directly to the University at the start of each academic year so you don’t have to stress too much about that side of things. On the other hand, your maintenance loan (the money you’re expected to live off) will be paid in instalments, usually around every four months, so you’ll have to look after that part yourself
If you are extremely lucky, you might not be depending on the government to see you through. Maybe you’re parents are wealthy or you had a decent job when you were at college. This doesn’t mean you can afford to spend your money like crazy though; you’re in the same place, except with a little bit of flexibility.
What you need to do as soon as possible is work out a budget. If this has got you thinking, who is this loser suggesting that I limit my spending?, I understand where you are coming from. I didn’t master the ancient art of budgeting until my third year, but I wish I’d done so much earlier. Not only did it allow me to keep afloat and never go into overdraft, it also meant that when I left University and joined the real world, I was well prepared. Can you name any adults that don’t budget their money in some way? If the answers yes then you must know a billionaire or someone who is quite irresponsible.
You need to think of yourself as if you are a start-up business. Every entrepreneur must come up with a budget before they can start doing anything else. In essence, it allows them to see how much money they will have to spend, how long for, and where it can be spent. It’s the same principal for a student budget.
Work out how much money you will have for the next four months. Then divide that number by the number of weeks. Then you need to figure out what you will definitely be spending cash on each week. Here’s a simplified fictional example:
September to December Budget = £1000.
£250 a month.
£62.50 a week.
Costs= £20 food shop £30 night out fund £12.50 contingency
Let’s ignore the fact that if this budget was for fresher’s week, the whole 62.50 would be spent on nights out, but the principal is the same. I always made sure that I factored in some contingency money so that if i could afford something extra like a new book, a trip to a restaurant or a few extra drinks on a night out. And anything you don’t spend can be saved or put towards next week. The key to it is to be realistic. If at any point you say to yourself, I could PROBABLY do my food shop with this much money, then you won’t be able to do so. I know from experience.
A couple of my course mates spent their entire maintenance loan in their first month and had to rely on the dreaded overdraft. That meant that they were in debt to the bank and had to struggle until the next loan payment, three months later. That’s why I stand by the power of a good budget. Hopefully it’ll help you avoid a situation like this and be able to enjoy University to its fullest. What’s important to remember is that University is all about finding yourself. And this extends to your budget. You won’t get it bang on the first time and it’ll take a few attempts and a lot of rejigging, but eventually you’ll find what’s right for you.
My next blog will explore food shopping in detail, such as where, and when, to go.